ASOS latest refinancing reflects improving prospects for e-tailer

ASOS has announced the “successful refinancing” of its asset-backed loan facility into a secured term loan and delayed draw term loan (DDTL) with a new syndicate of private lenders. 

The recovering company, which is due to report its full-year results at the end of next week, said the refinancing “brings materially improved financial terms, including £87.5 million additional liquidity headroom, increased financial flexibility over an extended five-year term to 2030, and a c.£5 million like-for-like reduction in annual cash interest costs versus the previous Bantry Bay facility”.

It means the company is entering “the final phase of its multi-year turnaround with a significantly strengthened balance sheet and the right level of flexibility to focus on re-engaging customers at scale. The improved financial terms reflect the enhanced profitability and significant strategic progress of the company during the successful execution of the first two phases of its journey, focused on building sustainably profitable and resilient foundations”.

CFO Aaron Izzard hailed the “further strengthening of our balance sheet and financial flexibility through this strategic refinancing. As well as offering improved financial terms, it better positions us to deliver on the final phase of our turnaround strategy and growth plans with greater confidence and resilience”.

The former high-flying ASOS has seen its finances in a much weaker state during much of this decade. After the pandemic online boom subsided, its fortunes waned and in May 2023 it entered into the crucial deal for £275 million of loans and credit facilities with Bantry Bay Capital to run for just under two years.

But its finances have steadily improved and in September 2024, its sale of a controlling stake in Topshop/Topman and the refinancing of its debt had a very positive impact on its overall net debt position.

Earlier this year its improving prospects were reflected in two leading credit insurers — Atradius and Coface — again offering cover for its clothing suppliers, signalling renewed confidence in the business’s financial stability. 

The latest refinancing announced Thursday underscores that progress.